3 companies hitting 52-week lows – is this the bottom?

There’s actually 146 companies hitting 52-week lows, but here’s three of the best.

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The list of companies hitting 52-week lows just keeps getting bigger each week. Some of its incumbents, like Freelancer Ltd (ASX: FLN,) and Seven West Media Ltd (ASX:SWM), are relatively new additions; some are completely new, like Macquarie Telecom Group Ltd (ASX: MAQ), Primary Healthcare Limited (ASX:PRY), and Invocare Limited (ASX:IVC); while yet others like The Reject Shop Ltd (ASX:TRS) are making their second separate appearance so far this year.

Then there’s another group that I suspect we might be seeing a lot more of over the coming weeks; New Hope Corporation Limited (ASX: NHC), Super Retail Group Ltd (ASX:SUL), Dick Smith Holdings Ltd (ASX:DSH), Myer Holdings Ltd (ASX:MYR),  Atlas Iron Limited (ASX: AGO), and Trade Me Group Ltd (ASX:TME). Poor retail conditions and commodity prices for iron and coal look unlikely to deliver an upside any time soon. That said, there are some gems in the bunch:

The Reject Shop – last traded at $8.24, down 49% for the year

Now trading literally at half price, The Reject Shop’s fall from grace has as much to do with poor consumer confidence and a general retail sell-off as it does with the company’s recent profit downgrade.

With profit expected to be in the range of $14.5-15.5 million (down from $17-18 million previously), shareholders have jumped ship en masse with the result that The Reject Shop continues to look cheap despite the decline in profit guidance. Parallel importing is a great way to take advantage of Australia’s status as the most expensive country in the world, and despite falls in the AUD I expect The Reject Shop to return to growth soon.

Atlas Iron – last traded at $0.64, down 18% for the year

With the iron price tumbling it’s no surprise that iron miners have had their share prices hammered. I wouldn’t be buying while the market appears to be still falling; however there are a couple of little gems worth keeping an eye on. Atlas Iron is one of these, and fellow junior miner BC Iron Limited (ASX: BCI) is the other.

Both miners are enjoying continued success in their exploration and expansion efforts, and both are among the lowest-cost iron producers on the ASX with solid cash positions and growth prospects. If reduced profits on their annual reports start to make their share prices look forlorn, they become excellent candidates for a turnaround as the iron market improves.

Primary Healthcare – last traded at $4.38, down 10.8% for the year

With profits continuing to grow (up 8.6% in the last half-yearly report) and expanding arrangements with BUPA, Primary Healthcare looks nothing short of a bargain at the moment. If there’s one thing investors can bet on besides death and taxes, it’s healthcare demand. Australia’s got it pretty good, but we’re a long way from being the healthiest people, both physically and mentally. Rising demand looks almost certain, which is good news for companies like Primary Healthcare.

Motley Fool contributor Sean O'Neill owns shares in The Reject Shop.

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